Megapolis Chennai: Chennai building its next growth story: Suresh Sambandam

Chennai’s next growth phase…

Chennai will continue to be a heterogeneous industrial city. While Bengaluru is largely an IT city, here we have automobiles, electronics and IT, especially B2B software such as SaaS. These three will continue to dominate. That is a good thing because when one industry slows down, another sustains the city. The government is also focusing on building deeper backward integration in electronics. Right now, we are doing a lot of assembly. In automobiles, we already have a strong spare parts manufacturing base. In addition to large manufacturers like BMW, we have companies that make brakes, linings, nuts and bolts, and tyres. We are also starting to see ancillary units come up for electronics. By 2035, Chennai will have a deeply integrated electronics manufacturing hub.

AI changing tech, non-tech sectors…

Chennai already has AI in its name - Chen.AI! That is how we want to position ourselves. Many companies here are transforming into AI-first or AI-enabled enterprises. There will be a short-term challenge because people have to train, re-train, and adapt. It might take two or three years, but by 2027 or 2028, this transition will be complete. By 2035, we will have a large pool of AI-trained professionals. Chennai and Tamil Nadu have some of the smartest engineering talent in the country. Once they get re-trained in AI, we will see explosive growth. Right now they are trained in programming, but soon they will be trained in AI.

Building EV and clean mobility ecosystem…

The future of cars is electric. Tamil Nadu has already invested heavily, with an EV park coming up near Hosur. That will be a big employment opportunity because we already have a strong automobile base. We have made a start with new players like VinFast entering, which is positive, but that alone is not enough. We need to do more. For example, we should aim to build our own EV brand, the way BYD did in China.

Tamil Nadu could consider a joint venture model, like what TIDCO did with Titan. That would be a game-changer.

Is Chennai’s startup ecosystem conservative?

I would not say it is a problem unique to Chennai founders. The challenge is the lack of a strong investor base. If you take Freshworks, they scaled very fast, so it is not about Chennai being slow. The real issue is that we do not have enough venture capital. Between 2010 and 2020, we missed building a start-up ecosystem, and that is why we lagged behind. Investors go where the ecosystem already exists. If there are more startups, investors will come. It is a simple supply and demand equation. Once Chennai develops that ecosystem, investors will naturally set up offices here. Since 2021, after the government renewed its focus, things have improved a lot.

About next generation of entrepreneurs…

They need a stronger ecosystem, and that is finally being built. We are developing Idea Pattarai, Tamil Nadu’s open startup ecosystem, where founders can access mentorship, funding and coaching. It is something we should have started 10 years ago, but at least now it is happening. More than 2,000 founders have already come onboard, and in the next five years, you will see a huge impact.

Chennai of 2035…

By 2035, Chennai will be a $1 trillion economy. I expect the average family household income to be around Rs 10 lakh a year, up from about Rs 2.5 lakh now. That means even people working in non-IT sectors, like drivers, will have significantly better living standards. They will be able to provide good education and healthcare for their families. That is the future I see for Chennai.